So, this is what happened yesterday, the U.S treasury included China on the list of countries manipulating its currency (after Trump accused the Asian country of the same thing) because China didn’t support the 7 yuan per dollar level, as it´s been doing for the last eleven years. How insane is it to call a manipulator a central bank that doesn’t intervene? I mean, of course there were always manipulations by the Chinese central bank, they fix the value of their currency, so that is a given, but not yesterday. Yesterday was just another inflammatory rhetoric by the U.S, which interestingly enough sent the S&P500 futures below the 200-day moving average.
As an experienced trader, I tend to be pragmatic, everyone manipulates but in the end charts tend to reflect the reality and words from different entities are only means to an end. Nothing changed, but today Wall Street opened in rebound mode because China decided to restart its intervention on the Yuan or manipulating. Be careful with headlines, keep your mind on fundamentals and charts, they will tell you how the future plays out with a higher degree of reliability, however flawless it may be.
Photo by Kirill Sharkovski.
